You would have thought there isn't much choice on the matter - but you would be wrong.

Andrew Leigh, Joshua Gans and Elena Varganova, in a recent paper (free access), estimate that during annual obstetricians and gynecologists’ conferences, the number of births in Australia and the United States drops by 1 to 4 percent. This suggests, in the authors' words, that 'medical professionals are timing births to suit their conference schedule'.

These results suggest that doctors are clearly taking non-medical factors into account when deciding on the timing of some births, a clear case of moral hazard in the health system with unclear consequences on newborns' health.

But what about the parents themselves? It seems they have a say too: the authors suggest that when there is a potential conflict between parents wanting to avoid an 'inauspicious date' (such as April 1) and doctors wanting to enjoy the weekend, it is resolved in favour of the parents 25% of the time - not a bad batting average given the informational advantage physicians enjoy (after all, they are the experts).

And since parents are allowed this sort of power, few economists will be surprised that they use it to achieve financial aims too - at the same time demonstrating the potency of tax and benefit policy to alter behaviour.

Dickert-Conlin and Chandra point out that the tax savings of having a child in the US are fully realised only if the birth takes place before midnight, January 1, and estimate that increasing the tax benefit of having a child by $500 raises the probability of giving birth in the last week of December by a whopping 27%. Also, in a lesson in how not to introduce a government policy, Gans and Leigh (free access) explain why more Australian children were born on the 1st of July 2004 than on any other day in 30 years:

In 2004, the Australian government announced that children born on or after July 1, 2004 would receive a $3000 “Baby Bonus.” Although the policy was only announced a few months before its introduction, parents appear to have behaved strategically in order to receive this benefit, with the number of births dipping sharply in the days before the policy commenced. On July 1, 2004, more Australian children were born than on any other single date in the past thirty years. We estimate that over 1000 births were “moved” so as to ensure that their parents were eligible for the Baby Bonus, with about one quarter being moved by more than two weeks. Most of the effect was due to changes in the timing of inducement and cesarean section procedures.

And if you can save some tax by being born at the 'right' time, what about postponing that other important date in a person's life? The dynamic duo strikes again (free access):

In 1979, Australia abolished federal inheritance taxes. Using daily deaths data, we show that approximately 50 deaths were shifted from the week before the abolition to the week after (amounting to over half of those who would have been eligible to pay the tax).

On January 15, 2000, The New York Times reported that in the first week of the new millennium local hospitals had recorded an astonishing 50.8% more deaths than in the last week of 1999. [...] Apparently, the anticipation of momentous events can motivate people to live longer.

Phillips and King (1988) report that, among Jews, the number of deaths was lower than expected in the week before Passover and higher than expected in the week after; the pattern was most pronounced in years when the holiday fell on a weekend, when it is most likely to be celebrated by the largest number of people. Phillips and Smith (1990) find that mortality among Chinese dips by 35.1% in the week before the Harvest Moon festival and peaks by the same amount in the week after. Anson and Anson (1997) find a similar effect related to the timing of Ramadan for Moslems living in Israel, and note that the effect was larger for women than for men, reflecting their different roles in the celebration of the holy day rites.

And here's the paper's conclusion, which (undeservedly) landed them the 2001 Ig Nobel Prize for Economics:

Evidence from estate tax returns suggests that some people will themselves to survive a bit longer if it will enrich their heirs. That there is any effect at all adds to the large body of evidence that taxes affect behavior, and particularly the timing if behavior, including activities such as marriage and childbearing which are not generally thought to respond to financial incentives.

The moral of the story? Birth, death and taxes are indeed the only certainties in life, but don't underestimate the power of the latter to affect the timing of the first two: make sure you keep your accountant, tax advisor and even travel agent in the loop at all times.

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This blog reflects my personal views and is in no way representative of those of my employer or my mum. To make sure no misunderstanding arises and their lives stay stress-free, I will remain anonymous.